We share our Tax Bulletin No. 17 from November 2019, with the latest decisions and opinions released by the Council of State and the Tax Authority, in connection with national and local taxes, and tax procedure.
The complete Bulletin is found only in Spanish in the below PDF, because of many domestic tax terms we are unable to translate for you. However, please find below the main subjects we will be speaking of in the Bulletin. If you are interested to find out more information, do not hesitate to contact us.
1. Legislation
1.1. The Ministry of Finance and Public Credit issued the regulation for the profits of the foreign capital investments funds
On October 29th, 2019 the Ministry of Finance and Public Credit issued the Decree 1973 by means of which is regulates section 18-1, 23-1 and 368-1 of the Colombian Tax Code respect the taxation of the profits received by foreign capital investments funds. In the Decree, the Colombian Government included several definitions as well as the procedures to be adopted for the taxation of the profits.
1.2. The Colombian Government issued a new Decree to simplify procedures
On November 22nd, 2019 the Colombian Government issued a new Decree that simplifies several procedures. This Decree modifies several provisions contained in the Colombian Tax Code. The main adjustments include new rules regarding the access to information by the taxpayers. For example, the Decree obliges the local tax authorities to release in their web pages the yearly tax calendar.
1.3. The Colombian Tax Authority issued the form that must be file by income taxpayers regarding the fiscal and accounting reconciliation
On October 28th, 2019, the Colombian Tax Authority issued Resolution 71 in which it included the form that has to be completed by the income taxpayers that are obliged to have accounting books or for those who willingly maintain books. The Form has to be completed by the abovementioned taxpayers and, only the taxpayers that earned gross income equivalent to 45.000 tax units are obliged to file the Form before the Colombian Tax Authority.
2. Rulings
2.1. The Colombian Tax Authority issued the ruling 19690 of 2019 providing its interpretation related with the withholding taxes applicable in the framework of the acquisition of real estate.
On June 17th, 2019 the Colombian Tax authority issued the ruling 19690 of 2019 providing its interpretation related with the withholding taxes applicable in the framework of the acquisition of real estate. The Tax Authority indicated that the document evidencing the payment of the national consumption tax over real estate must be included in the public deed in accordance with section 1.3.3.28 of the Decree 961 of 2019. On the contrary, in accordance with section 401 of the Colombian Tax Code, the income withholding tax receipt does not have to be included in the public deed.
2.2. The Colombian Tax Authority issued on July 2019, a ruling indicating that foreign companies that have their place of management in Colombia can access to the Holding Regime
On July 10th, 2019, the Colombian Tax Authority indicated that foreign companies that have their place of management in Colombia can access to the Holding Regime provided they met all the legal requirements included in the Law to be able to benefit from such regime.
3. Judgements
3.1. The Colombian Council of State issued a judgement indicating that the requirements to access the benefits provided in Law 14029 of 2010 are legal
On August 8th, 2019, the Colombian Council of State issued a judgment in framework of the lawsuits filed against sections 6, 9 and 18 of the Decree 4910 of 2011 and 11 of the Decree 0489 of 2013. These Decrees regulated Law 1429 of 2010 by means of which the Colombian Government granted several tax benefits to taxpayers that comply with the requirement set forth in such provisions. In the judgement, the Colombian Council of State indicated that the requirements were not considered to be illegal or against the Colombian law.
3.2. The Colombia Constitutional Court issued judgement C-514 of 2019 indicting that the Colombian taxpayers are allowed to base their tax policies and decision on the rulings issued by the Colombian Tax Authority
On October 30th, 2019 the Colombian Constitutional Court, issued judgement C-514 by means of which it decided a lawsuit filed against section 113 of Law 1943 of 2018. By means of this section, the Colombian Government indicated the Colombian taxpayers could only based their tax policies and decision on the Colombian Law, this means that they could not base their decision on the rulings issued by the Colombian Tax Code. In this judgement, the Colombian Constitutional Court indicated that this provision infringed the Colombian Constitution and, could only be valid as long as it was interpreted that the word Law included the rulings of the Tax Authority.
3.3. The Colombia Constitutional Court issued judgement C-510 of 2019 indicting that income surcharge created by Law 1943 of 2018 for financial entities is unconstitutional
On October 29th, 2019 the Colombian Constitutional Court, issued judgement C-514 by means of which it decided a lawsuit filed against section 80 of Law 1943 of 2018. This provision created an income surcharge for financial entities located in Colombia. In accordance with the judgement, said provision violated articles 157, 160 and 347 of the Colombian Constitution.
4. Draft of Bills, Decrees and Resolutions
4.1. The Colombian Government filed a new tax bill on November 2019 following the request made by different actors of the economy
The Colombian Government filed on November 2019 file before the Congress a amended tax bill. IN October, following the declaration of unenforceability of Law 1943 of 2018, the Government filed the same tax bill approved in 2018. Nonetheless, due to several request from different actors of the economy, the Colombian Government filed a new tax bill with a few modifications. The new tax bill contains a new normalization, incentive for companies to hire young employees, VAT exemptions, among others.
4.2. The Colombia Tax Authority released on November 2019, a draft of resolution by means of which it would modify the Resolution 30 of 2019 related with the electronic invoice
ON November 2019, the Colombian Tax Authority released a draft of Resolution that would modify Resolution 30 of 2019 that regulates several issues of the electronic invoice in Colombia. In the draft, the Colombian Tax Authority included several modifications. Nonetheless, a major modification is that the credit and debit notes would not have to be necessarily linked to an electronic invoice.
4.3. The Colombian Tax Authority releases the draft of resolution by means of which it establishes the value for the tax unit for fiscal year 2020
On November 2019, the Colombian Tax Authority released the draft of Resolution indicating that, for fiscal year 2020, the value of the tax unit should be COP $35.607.
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